Bill of Exchange – Payment and Discharge – Cancellation Without Authority – Agent – Liability of Agent Employed to Collect Bill.
A bill having been protested for nonpayment, was afterwards forwarded to a bank agent who offered to try and obtain payment of it. The acceptors expressed their willingness to pay the amount of the bill and the protest charges on condition that they were freed from any claim for interest and expenses, and this condition was communicated to the holders. Without waiting for their reply the bank agent took payment of the amount of the bill and the protest charges, marked the bill ‘paid,’ and handed it over to the acceptors, who deleted their signatures. The holders refused to agree to the condition mentioned, returned the money tendered to them in payment of the bill, and received back the cancelled bill. They then raised an action against the acceptors, in which they obtained decree for the amount of the bill and interest thereon, and for the expenses of the action. Before this decree could be enforced by summary diligence the acceptors were sequestrated.
In an action by the holders against the bank whose agent had cancelled the bill, for payment of the bill, the interest thereon, and the expenses of the action against the acceptors, the House of Lords held ( aff. the decision of the First Division) that the defenders were liable, as the evidence showed that if the bill had not been cancelled without authority through the error of their agent, the holders might have recovered payment by summary diligence before the acceptors were sequestrated, and further ordered the pursuers to assign to the defenders any remedy they might have against the drawers of the bill.
Judges:
Earl of Selborne, and Lords Watson, Bramwell, and Herschell
Citations:
[1891] UKHL 946, 28 SLR 946
Links:
Jurisdiction:
Scotland
Banking
Updated: 29 June 2022; Ref: scu.636774
